By FIL C. SIONIL
Finance Secretary Juanita D. Amatong yesterday cautioned against plans to repeal the automatic debt service appropriations as it may close the window of opportunity for the country to avail of offshore financing, if not, pay a higher cost for its fund-raising activities to finance government expenditures.
"This is tantamount to making the Philippines an irresponsible borrower," said Amatong, reacting to reported plans of a proposal to abolish Presidential Decree 1177 that allows the automatic allocation for debt service payments.
Amatong said that this statement "will weaken the country’s credit position," particularly, at this time, when the market is very volatile.
Legarda, who is the running mate of actor-turned neophyte politician Fernando Kelly Poe, was quoted as saying that fiat will be repealed if the actor wins the presidential election in May.
"This is not an opportune time to talk about the abolition of the automatic appropriations for debt service in the light of the prevailing market uncertainties," Amatong said.
Since mudslinging has been among the order of the political scene as early as December 2003, the peso continued to be battered against the US dollar, causing it to slump a historic intra-day low of
P55.22. The depreciation of the peso was compounded by the widening of the spreads or interest of government securities.
From only 11 percent when the government made its maiden issue this year, the seven-year Treasury bonds fetched at 11.361 percent yesterday. Due to higher cost, the authorities only sold
P1.647 billion out of the P4.5 billion volume offering.
"Will you lend to someone who cannot, at the very least, commit to pay you back," Amatong quipped.
According to the finance chief, the government is raising money from the market to finance its expenditures because "we have been passing budgets that results in deficit."
While she stressed that government authorities have been steadfast in their resolve to improve and enhance revenue collection efficiency through administrative measures, Amatong pointed out that administrative reform measures are not enough to bridge the revenue gap.
"Administrative reforms must be complemented by legislative measures, such as the indexation of sin products, to further enhance the revenue collections, and to minimize the grant of tax exemptions so as not to erode tax revenues," Amatong lamented.
Congress has failed to enact the indexation of sin products, which could have strengthened the national coffers this year. As a result, the authorities have reduced by
P12 billion the 2004 revenue target of the Bureau of Internal Revenue. 
